Guarantee for Yen-Denominated Privately Placed Foreign Bonds Issued by Petróleos Mexicanos
Revitalizing the Samurai bond market and strengthening multi-layered relations with the resource supplier
- Area: Latin America and the Caribbean
- Energy and Natural Resources
The Japan Bank for International Cooperation (JBIC; Governor: Akira Kondoh) on July 19 signed a set of agreements on guaranteeing yen-denominated foreign bonds (Samurai bonds) issued in Japan by the Mexican state-owned petroleum company Petróleos Mexicanos (PEMEX). A total of 80 billion yen in yen-denominated privately placed bonds will be issued, with Mizuho Securities Co., Ltd., SMBC Nikko Securities Inc., and Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., serving as arrangers, and Mizuho Bank, Ltd., serving as the bond administrator.
This guarantee is provided under JBIC’s Guarantee and Acquisition toward Tokyo market Enhancement (GATE) facility*1
for the issue of Samurai bonds. Supporting PEMEX’s issue of Samurai bonds in the Tokyo market through credit enhancement due to this guarantee from JBIC will create wide-ranging investment opportunities for Japanese investors and contribute to maintaining and strengthening the competitiveness of Japan’s capital markets. It will also assist PEMEX in diversifying its sources of financing.
Given that Japan relies on the Middle East for about 80% of its crude oil procurement, diversifying the country’s crude oil suppliers to ensure a steady supply of crude oil is a major issue. A July 2015 report by the Natural Resources and Fuel Committee under the Advisory Committee for Natural Resources and Energy noted the importance of crude oil imports from Mexico, which has been seeking to step up its exports to Asia. The energy reforms resulting from the amendments made to the Mexican constitution in 2013 have given foreign companies access to upstream crude oil concessions that had been monopolized for the preceding 75 years, and Mexico has been seeking to work with foreign companies to boost crude oil production. In this context, Japanese companies are facing greater business opportunities across the entire spectrum of resources and energy, such as obtaining concessions and entering refining and other midstream/downstream businesses as well as the natural gas and LNG businesses.
JBIC had previously concluded a memorandum of understanding and cooperation with PEMEX to establish and develop long-term cooperative ties,*2
and it has been engaging in annual policy dialogue meetings with the Mexican government in an effort to establish multi-layered relations with the resource-supplying country of Mexico. The latest set of agreements can be expected to further strengthen relations with PEMEX and Mexico, and to offer lateral support to Japanese companies pursuing business opportunities in Mexico’s resource and energy markets.
As Japan’s policy-based financial institution, JBIC will continue to contribute to the sound development of Japan and the international economy and society by drawing on its various financial facilities and schemes.
- *1 Please see Press Release on April 15, 2010.
- *2 Please see Press Release on July 28, 2014.